Question

Roma took a loan of $Rs.16,000$ against her insurance policy at the rate of $12\frac{1}{2}$ per annum. Calculate the total compound interest that will be paid by Roma after $3$ years.

• A. Rs. $6781.25$
• B. Rs. $6925.30$
• C. Rs. $4296.82$
• D. Rs. $3579.71$

Answer 1

Answer: (A)

Rs. $6781.25$

In case of compund interest,

$C.I.=P[{(1+\frac{R}{100})}^N-1]$

where : $C.I.$ - Compound Interest, $P$ - Principal, $R$ - Rate of Interest, $N$ - Number of years.

The compound interest Rama has to pay

$=16000[{(1+\frac{12.5}{100})}^3-1]=16000\times \left[\right(1.125{)}^3-1]=16000\times 0.424=Rs.6781.25$